Mechanical Design and Development: Tesla Inc. - Engineering Report

This report provides a comprehensive analysis of Tesla Inc.'s mechanical design and development, examining its journey from inception to its current standing in the electric vehicle market. The report begins with an introduction to Tesla, its founding, and its core business of manufacturing electric cars. It then delves into the technological innovation model, specifically placing Tesla within Utterback's dynamic model, highlighting its progression through fluid, transitional, and specific phases. Furthermore, the report conducts a PEST (Political, Economic, Social, and Technological) analysis to identify factors influencing Tesla's production and market position, including government incentives, economic growth, social acceptance of eco-friendly products, and technological advancements. The report also discusses potential future challenges, such as technological obsolescence and the rise of alternative fuel technologies. Finally, the report explores Tesla's strategic development approaches, focusing on direct sales, the Certified Pre-Owned program, and its overall goal of promoting sustainable energy. The report concludes with a discussion of the company's future direction and its potential impact on the automotive industry.

1Running head: MECHANICAL DESIGN AND DEVELOPMENT
MECHANICAL DESIGN AND DEVELOPMENT: TESLA INC.
NAME
INSTITUTIONAL AFFILIATION

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Introduction
Tesla, Inc which was formerly known as Tesla Motors, is an American Electric-cars
and automobile factory. Founded in 2003 by an American entrepreneurs Martin Eberhard and
Marc Tarpenning designed who decided to name the product and the company after a Serbian
American Inventor Nikola Tesla. The original idea was to form a sports car that is electric. The
company got its funding mostly from PayPal and a cofounder Elon Musk, these two contributed
a total of $30 million (Erik & Schreiber, 2019).
The basic operation of Tesla cars/automobiles is related to the basic knowledge of
how phones or laptops are charged, then later used off-grid, the electric cars uses the same
principle. They have lithium-ion batteries, just the same as the ones used to power the devices
mentioned, only that they are numerous cells put together. These batteries are manufactured
within the company, Tesla Bay HQ and equipped with a heat resistance, and generates heats as
well, which material that guarantees 100% functioning in every weather. The batteries are
charged using different techniques, one of the ways are very simple, by just installation of a
charging station where the car is plugged and its charges, this requires someone with the know-
how (Smith, 2019). Solar panels can be installed, so that as the vehicle moves, the battery gets
charged, or during the reverse of the car, the battery can get charged, which shall be discussed
further in this paper. Generally, Tesla cars will and have to some extent revolutionize the way
cars are operated.
In this paper, we are going to discuss the technological life cycle the model belongs,
the factors affecting the production of late and what we think shall be the main impediment in
the future, and the strategic approaches the product can be developed that attract more buyers.

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The Technological Innovation Model
Looking at the James Utterback dynamic model of technological innovation, there
are three level mentioned, the fluid phase, transitional phase and the specific phase. The fluid
phase takes place when launching a product in the new market (Kairos management , 2013). At
this phase, there shall be a merger of designs, because the technocrats are starting to question
themselves what works and what doesn’t. at this stage, there’s experimentations of the product
going on (Izw, 2006). The second phase is the transitional phase, at this stage the producers or
innovators are beginning to learn more about the product and how the market is reacting to the
new innovation. This phase is what the innovators call the transitional phase, the product
transition into an amalgamation of design ideas that covers the market. The dominant design has
characteristics that must be adhered to by the innovators and competitors, to have a great market
share (Utterback, 1994). The last phase is the specific phase, this phase the designed products
now focuses on the performance and the cost. The market segments are now clear in the minds of
corporates and focus can now be shifted to certain markets where the product buyers seem to
have affinity.
Having viewed the three phases, and looking at our product, we can say that Tesla is
in the specific stage of innovation. Tesla Inc. was in the first stage, fluid stage of innovation in
2003, when it was founded, when the idea of electric car was revived in the motor industry. In
2008, the first car was released, which was completely electric and tested in a stretch of 394Km
or 245 miles, when it was charged on one go. After much criticism, Tesla stopped producing the
Roadster, the first produced car that was tested, which dwells much on the performance and
design. This prompted the company on the battery design to give much more power to the new
car design, so that on a single charge, the car could now go for a maximum of 483Km or about

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300 miles. With the design of the Model S having its battery on the floor of the car unlike the
earlier model where the battery was in the front (Erik & Schreiber, 2019). After the car appealing
to many across America, Tesla continued to grow in sales and stations begun being developed
across America, which were now called Tesla stations. Another model was released called
Model X, which is a vehicle with a sports car feature. Released in 2015, this car now even
stretches for longer distances. Model X became more expensive for people and Tesla in 2017
unveiled another model called Model 3, with much lower distance ranges, of about 354km or
220 miles and the price went much lower than the previous models, $35,000. In 2010 (Varty,
2018), the company was listed in the US securities or stock market. Their sale is mostly
dominated by Americans, with 7% 2018 market share of electric cars, Model 3 is also ranked the
highest in sale among the 20 electric cars in the world (Shahan, 2019).
Factors Affecting the company
In looking at these factors we shall consider the Political, Economic, Social, and
Technological factors (PEST) theory.
Political factors
As we have seen, Tesla Inc. thrives in the fact that it uses electricity to run unlike the
other conventional vehicles that uses fossil fuels to run. The US government at some point took a
stance to develop the electric engines and even those of hybrid cars. This has improved the sale
of Tesla cars because the US government said to have make the buyers of these cars qualify for
tax credits of at least $5,000 (Frue, 2018). This incentive has given Tesla a notch in improving
sales and targeting new markets. The global trade agreements have also made Tesla be friendly
to other nations, this has seen the company expand into other foreign markets. In countries where

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Tesla have made a mark in terms of sales, mostly Europe and China, those countries have had
political stabilities improving business environment for Tesla (Kissinger, 2019).
Economic Factors
There has been a rise in the sales of electric cars from 2017 globally, since the global
economy has also risen. The rise in economy in countries in the Asia, Europe as well as the
United States, have led to more electric cars being developed, thereby raising competition. This
has come even as the electric car sales have soared by over 30% between the year 2016 to 2017
(Gorzelany, 2019). The materials used for manufacturing these mars, have declined in price, this
includes the batteries used. This is a great news for the company, especially when the reduction
touches on the batteries. This will make their cars more popular because their presence in some
countries is key. Now Tesla can focus on developing more vehicles which are cost effective for
people.
Social Factors
The fact that Tesla manufacture cars which are eco-friendly, have found in a place in
the majority of people’s hearts. People love eco-friendly materials, and gadgets, and if now in the
fray, there are cars too, then Tesla will be loved by many people. Tesla are not only eco-friendly,
but also that their models are made in a luxury car type. The combination of the two will bring
population towards Tesla. With these factors, Tesla’s growth in the multinational business world
of automotive appears to be on the upward trajectory. Wealth distribution in the developing
markets has gotten a boost with Tesla’s financial performance in those markets.

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Technological Factors
This is where we talk about the technology that Tesla applies and how the market has
responded to that technology or how it has affected the macro-environment. The reason why
Tesla has found love in many people’s heart is the way they have used their technology. From
the material engineering technology, they have employed to how they have made their batteries
less cheap. The rate of technological change has become an opportunity and a threat at the same
time. The rate of change in technological advancements has given the company an opportunity to
advance its product and present it to the market. This technology has brought with it a threat, in
that there are many new changes in technology that renders what Tesla has had obsolete. The
growth of automation in the industry of automotive has created an opportunity for Tesla, and to
those who have embraced it, it has posed to be a threat.
The Factors That will affect Tesla Inc. and the automobile in the future are many,
and some have been looked at in the factors that are presently affecting the company. One of the
factors that could affect the company is the growth in technology. With each passing day,
technology changes such that what is latest today, is obsolete tomorrow. In the automobile world
we have seen self-driven cars, which are threatening to take the market by storm. Another factor
that could affect Tesla is soaring prices fossil fuel. The countries producing oil and therefore
fuel, have expressed fears that the fuel industry could face a threat by the reduction of fuel in the
oil fields (Stanford, 2018) This could boost the sale of electric cars and the likes of Tesla could
evade markets all over the world. When talking about this, we also talk about the emergence of
F-Cell cars, which are cars driven by injecting hydrogen in them and produces water as a by-
product (Herdlitschka & Stenger, 2019). Tesla, still has a long way to go, in terms of creating
places for charging their cars, and also their prices still is high than the conventional cars. Until

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they are able to do the math and lower the price in some significant proportions, they will still
attract some class of the public.
Strategic Development of Tesla
The company has thrived in the industry of electric cars, and the technological
advancements that comes with it. The strategies Tesla has used to invade the market in Europe
and other places in the world, is coined by the fact that they are eco-friendly. This has made them
have a significant role in the transforming the world into sustainable energy. The company’s
strategy is a transitional strategy, where they plan to also achieve low costs. There are other
strategies that Tesla has employed in getting into customers and selling its cars.
Selling directly to customers, Tesla endeavours to sell its cars to customers directly at
the outlets stores and some are sold at the galleries and some even sold through websites. It is
said that the key reason for the direct sale is to prevent conflict of interest by the car dealers who
might also stock the fossil fuel cars at the same time. Direct sale, has ensured customer
satisfaction since Tesla can sell its cars at the same time deal with issues that might arise. This
also limits the amount that would have been spent to pay the dealers.
Another strategy is a practice dubbed Certified Pre-Owned (CPO), this is a buy back program
that practiced in some countries in Europe and Canada. Through this program, Tesla sold most of
its S model to customers guaranteeing them a purchase back of their cars. Tesla inspects these
cars brought back and refurbishes them buying at 43 – 50% of their sold prices. After
refurbishment, these cars are certified and their warranty extended after selling them at a reduced
price of about 63% of the price of S Model new car. This is a strategy that not only see the

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company increase in profit in car resale, but ensures an expansion of its market, attracting even
those who are not so rich to afford the brand-new cars.

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References
Erik , G., & Schreiber, A. B. (2019, April 4). Encyclopedia Bratannica. Retrieved from Tesla,
Inc: https://www.britannica.com/topic/Tesla-Motors
Frue, K. (2018, October 17). PESTLE Analysis of Tesla Inc.: The growth of the eco-friendly
electric car. Retrieved from PESTLE analysis: https://pestleanalysis.com/pestle-analysis-
of-tesla/
Gorzelany, J. (2019, March 21). 10 Reasons To Buy an Electric Vehicle in 2019. Retrieved from
MyEV: https://www.myev.com/research/why-buy/10-reasons-to-buy-an-electric-vehicle-
in-2019
Herdlitschka, M., & Stenger, A. (2019, August 1). Mercedes-Benz GLC F-CELL: Market launch
of the world's first electric vehicle featuring fuel cell and plug-in hybrid technology.
Retrieved from Daimler:
https://media.daimler.com/marsMediaSite/en/instance/ko/Mercedes-Benz-GLC-F-CELL-
Market-launch-of-the-worlds-first-electric-vehicle-featuring-fuel-cell-and-plug-in-hybrid-
technology.xhtml?oid=41813012

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Kairos management . (2013, Decemmber 30). Operational Excellence, Innovation, Change.
Retrieved from Kairos Management:
https://kairosmanagement.wordpress.com/2013/12/30/utterbacks-model-for-innovation/
Kissinger, D. (2019, February 19). Tesla, Inc. PESTEL/PESTLE Analysis & Recommendations.
Retrieved from Panmore Institute: http://panmore.com/tesla-motors-inc-pestel-pestle-
analysis-recommendations
Shahan, Z. (2019, February 9). Tesla Model 3 = #1 Best Selling Electric Car in World, 7% of
Global EV Market in 2018. Retrieved from Clean Technica:
https://cleantechnica.com/2019/02/09/tesla-model-3-1-best-selling-electric-car-in-world-
7-of-global-ev-market/
Smith, C. (2019, February 18). The amazing tech behind Tesla’s electric cars . Retrieved from
Know Techie: https://knowtechie.com/the-amazing-tech-behind-teslas-electric-cars/
Stanford. (2018, September 12). REDUCING OIL ‘FLARING’ COULD CUT EMISSIONS IN A
BIG WAY. Retrieved from Futurity: https://www.futurity.org/oil-production-emissions-
flaring-1861772/
Varty, A. (2018, October 4). If You Had Invested Right After Tesla's IPO. Retrieved from
Investopedia: https://www.investopedia.com/articles/active-trading/081315/if-you-
would-have-invested-right-after-teslas-ipo.asp

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